IS THE IPO PROCESS A SCAM?

Summary from the TLDR Founders newsletter

Figma's stock popped 250% on IPO day - the highest since 1999. For those who weren't following, this wasn't actually mispricing, but artificial scarcity at work. Only 3% of shares were available to trade because investment banks deliberately keep the float tiny. Long-term investors got their allocation and held tight while traders scrambled for the few shares available. Within days, the stock crashed 50% as reality set in. Now it's easy to call IPOs a scam, but this is exactly how the system is designed to work - banks manufacture these pops to make headlines and reward their best clients with instant profits.